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The BP oil spill and American capitalism

As usual the web of corruption is dense and well entrenched. The Obama administration’s announcement earlier this year that he would expand offshore oil drilling was a clear sop for the oil industry, as was his earlier decision to appoint Salazar as Interior Secretary. Suckling noted that as a Senator for Colorado Salazar supported the Gulf of Mexico Energy Security Act of 2006, which expanded drilling. Salazar received money from BP, and when he became Interior Secretary he brought several BP officials on his staff.

By Tom Eley & Joe Kishore // 8 May 2010 [print_link]

THE EXPLOSION on the BP oil rig Deepwater Horizon on April 20 off Louisiana’s coast, which took the lives of 11 workers and has resulted in a massive oil slick that threatens economic and environmental ruin for the Gulf Coast, stands as a powerful exposure of American capitalism.

Each day brings new revelations that federal regulators under both the Bush and Obama administrations aided and abetted BP and the oil industry as they disregarded safety and environmental precautions that might have prevented the disaster.

Some of the most recent revelations include:

• In 2000 the Minerals Management Service (MMS) requested industry advice on problems related to the cementing used around deep sea well caps to stop blowouts. The oil industry never produced recommendations, and no regulation was put in place.

• A 2002 study conducted by the MMS revealed that vital equipment on oil rig blowout preventers did not function. In laboratory testing of one manufacturer’s shear rams—devices used to sever pipes after a blowout—half failed. Seven other makers refused to have their shear rams tested.

• In 2002, Pers Holland, a Norwegian researcher commissioned by the MMS, found that two sets of shear rams should be used in blowout preventers, rather than the industry standard of one. Holland reported that using a single cutting device could result in failure to plug leaks in 10 percent of all blowouts. The MMS disregarded Holland’s proposal.

• A study commissioned by the MMS in 2004 raised serious doubts as to whether equipment in blowout protectors could even function under deep sea oceanic pressures. No standards were put in place.

• Deepwater Horizon lacked an “acoustic switch,” a backup mechanism for triggering the blowout preventer in the case of an explosion. The US oil industry found these units’ $500,000 price too expensive and MMS did not require them, although they are mandated by Norway and Brazil.

• The number of drill site inspections carried out by the MMS fell by 41 percent between 2005 and 2009, even as the number of drill rigs operating in US waters increased. The number of penalties issued by MMS for regulatory violations fell from 66 in 2000 to 20 last year.

• In June of 2009, the MMS exempted BP from producing a legally-mandated environmental impact study for the site where Deepwater Horizon would drill. Obama was earlier warned by the National Oceanic and Atmospheric Administration (NOAA) that MMS studies approving offshore drilling were not reliable.

These decisions led directly to the deaths of 11 workers aboard the Deepwater Horizon and the environmental catastrophe in the Gulf. The workers killed in the BP explosion are only the latest casualties. According to data from the International Regulators Forum, from 2004 through 2009 offshore oil workers on US rigs were four times more likely to be killed in industrial accidents and 23 percent more likely to be injured than oil workers in European waters. While there were 5 “loss of well control” disasters on US drill rigs in 2007 and 2008, in five other major offshore drilling nations—the UK, Norway, Australia, and Canada—there were none.

Since 2001 there have been 69 deaths, 1,349 injuries and 858 fires or explosions on oil rigs operating in the Gulf of Mexico alone, according to the International Association of Drilling Contractors.

The incestuous ties between the MMS and the oil industry have not been severed with the election of Obama. Obama was in fact the top recipient of BP “employee donations” in the 2008 election cycle, and the company has mobilized tens of millions in a massive lobbying campaign that has brought on board such powerful Washington insiders as Democratic Party kingmaker John Podesta, former Democratic House majority leader Thomas Daschle and former Republican Senator Alan Simpson (a key member of Obama’s bipartisan budget committee). Current CIA director Leon Panetta has also served on BP’s “external advisory council.”

Only weeks before the Gulf disaster, in an open sop to the oil companies, Obama declared his intention to make large regions of the US coastline available for oil drilling.The Deepwater Horizon explosion is the result of decades of “deregulation,” which proclaimed that the “free market” could best regulate itself. Beginning in the late 1970s, the US government, under both Democratic and Republican administrations, has worked to systematically eliminate all constraints on corporate profit-making.

The result has been disastrous for the population of the US and the world. Corporations controlling vast social resources make decisions affecting millions of people on the basis of profit. Working hand in glove with “regulators,” little more than wholly owned subsidiaries of industry, the corporate elite targets for elimination any outlay that diminishes profit returns to the top executives and shareholders, whether it be environmental protection, product safety, or workers’ safety—as a spate of recent deadly workplace accidents has revealed.

In industry after industry the story is the same—mining, auto production, transportation, telecommunications and, of course, the finance industry. Indeed, the eruption of toxic oil from the bottom of the sea has its parallel in the eruption of toxic assets that set off a financial crisis in 2008. Led by the Obama administraiton, national governments responded to this disaster by bailing out those responsible—the financial elite—and leaving the working class to foot the bill. In this sense, the crisis in the Gulf and the crisis in Greece are connected by a common social and economic system.

The assets of BP, Transocean, Halliburton and their executives—hundreds of billions of dollars—must be appropriated and used to make the people of the Gulf whole and to put in place a massive environmental cleanup program. The executives and regulators whose policies caused the disaster should be criminally prosecuted.

The stranglehold of the corporate and financial elite over society and its resources must be broken. This requires the implementation of a socialist program for energy production. The big energy corporations must be seized and converted into public utilities, democratically run by the working class in the interest of social need.

Tom Eley

••••••

Obama administration blocked efforts to stop BP oil drilling before explosion

By Joe Kishore
10 May 2010

In 2009, the Obama administration intervened to support the reversal of a court order that would have halted offshore oil drilling in the Gulf of Mexico. Obama’s Interior Secretary Ken Salazar, who has long had close ties to the industry, specifically cited BP’s Deepwater Horizon operation as one that should be allowed to go forward, according to a group involved in the court case.

Ken Salazar, a betrayer of the public trust, but who appointed him?—>>>>

A Washington DC Appeals Court ruled in April 2009 that the Bush administration’s five-year plan for offshore oil and gas drilling (covering 2007 to 2012) was not based on a proper review of the environmental impact of the drilling. Only days before the ruling, the Obama administration had granted BP a “categorical exclusion,” exempting it from an environmental impact study for the Deepwater Horizon project.

The American Petroleum Institute, the oil industry trade group, intervened to reverse the court order, and was backed by the administration.

Kierán Suckling, executive director and founder the Center for Biological Diversity, which was involved in the original lawsuit, told the World Socialist Web Site that Salazar “filed a special motion asking the court to lift the injunction, and he cited the BP drilling several times by name in the request.”

In July 2009, the court ruled that drilling in both the Gulf and off the coast of Alaska could continue, on the condition that the administration conduct a study of the potential environmental risks. This study has yet to be completed.

Salazar praised the decision at the time, saying it allowed the administration to go forward with “a comprehensive energy plan,” including the BP project and a sale of leases for drilling in the Gulf.

Even since the explosion of the Deepwater Horizon less than three weeks ago, the Interior Department’s Minerals Management Services (MMS) has continued to grant “categorical exclusions” to oil and gas companies, allowing them to bypass environmental studies.

The administration has publicly announced that no new offshore drilling grants will be issued until a review, to be completed by the end of the month. Nevertheless, at least 27 exemptions have been granted, including one for a BP exploration plan for drilling at more than 4,000 feet. Another exemption was granted to Anadarko Petroleum Corporation for an exploration plan at more than 9,000 feet. The Deepwater Horizon was drilling at about 5,000 feet.

“The same problems we saw under the Bush administration are continuing under Obama,” Suckling said. “The change in political parties has done very little in terms of corporate domination of the political system. Who got to vote on turning over our natural resources to private corporations? The whole system is corrupt from the bottom up.”

The Obama administration’s announcement earlier this year that he would expand offshore oil drilling was a clear sop for the oil industry, as was his earlier decision to appoint Salazar as Interior Secretary. Suckling noted that as a Senator for Colorado Salazar supported the Gulf of Mexico Energy Security Act of 2006, which expanded drilling. Salazar received money from BP, and when he became Interior Secretary he brought several BP officials on his staff.

These latest revelations come as the haphazard and experimental attempts by BP and the government to stop oil from flowing into the Gulf have failed.

Oil is now beginning to appear on the coast, from Louisiana to parts of Alabama. Tar balls have washed up on the shore of an Alabama barrier island, according to the Associated Press.

Oil is also dispersed throughout the Mississippi Delta region. According to the Financial Times, a vessel it has chartered with Canadian oil spill consultants “located patches of thick crude oil on a beach at the mouth of the South Pass, one of the navigable channels of the Mississippi. ‘This is bad,’ said Dec Doran of Ontario-based Oil Spill Control Services, as he took samples from a saucer-sized patch of red-brown crude, the consistency of peanut butter. ‘If nothing is done, this will take 10 years to disperse.’”

On Saturday, the cofferdam—a 100-ton containment box or “dome” that BP sought to place over one of the major leaks—had to be removed after it was clogged by gas and water crystals. The project, which was presented as the most feasible short-term option for slowing the leak, was highly experimental, untested at the depths BP was drilling. The clog developed even before operators could hook up a tube intended to direct the leaking oil into ships above.

While BP has said it will try again, government officials have begun floating another, even more improbable scheme. Coast Guard Admiral Thad Allen, who is overseeing the government’s response, outlined on Sunday what he called a “junk shot” tactic. “They’re going to take a bunch of debris—shredded up tires, golf balls, and things like that—under very high pressure and shoot it into the [blowout] preventer.” he said on CBS’s Face the Nation.

These desperate measures are intended to give the appearance of action and hide the fact that neither the administration nor BP had in place any plans to deal with the failure of a blowout preventer, an entirely foreseeable event.

The actions could well have the effect of making the spill worse by damaging the pipe, which is restricting the flow of oil. Currently, oil is spewing out at a rate of between 5,000 barrels a day (government estimate) and 25,000 barrels a day (estimate of several scientists). If the pipe completely fails, the leak rate could soar to as high as 60,000 to 100,000 barrels a day.

At the same time, BP and government officials have noted that all attempts could fail. “It’s very difficult to predict whether we will find solutions,” said Doug Suttles, BP’s chief operating officer. “This dome is no silver bullet to stop the leak,” Rear Adm. Mary Landry of the Coast Guard acknowledged.

The major step intended to block off the well completely—drilling a relief well—will take several months to complete and is not guaranteed to work. In the worst-case scenario, which appears increasingly likely, the eruption of oil could continue until the entire reserve is drained—tens if not hundreds of millions of gallons of oil.

ABOUT THE AUTHORS

Tom Eley and Joe Kishore are senior political analysts with the World Socialist Web Site, to whom we express our thanks.